MAJOR bunker hubs Rotterdam and Singapore are to host most biofuel-blended deliveries in 2025, as demand and supply lag at smaller refuelling ports around the world, despite upcoming environmental regulations that could support biofuel uptake, according to bunker suppliers.

Bunker Holding, the world’s biggest marine fuel trader, expects biofuel bunker demand to more than double in 2025 owing to the FuelEU Maritime legislation that mandates vessels calling at EU ports to cut emissions intensity of on board energy from next year.

Bunker suppliers expect the majority of biofuel bunkering in Europe to happen in Rotterdam, as they have yet to receive clear demand signals at other locations.

“Most demand will remain in major hubs including Rotterdam and Singapore. We are logistically ready to supply in West Africa, but we need a clear demand signal. For now the demand signal is not there. We’re expecting that will change with FuelEU Maritime,” said Almanda Molter, energy regulatory specialist at bunker supplier Monjasa.

Rotterdam was the biggest biofuel bunkering hub in the world last year with total sales of 752,000 tonnes, down from 791,000 tonnes in 2023, according to the port authority. Singapore was the second biggest hub with 524,000 tonnes in 2023, up sharply from 140,000 tonnes the previous year.

Suppliers said shipping companies were still in the process of setting out their FuelEU compliance strategies.

“Companies have been focusing on the EU ETS, so the FuelEU Maritime, unfortunately, has been left behind,” said Monjasa’s Molter.

“Companies are just now starting to figure out how they will comply and whether they will use these flexibility mechanisms like banking, borrowing and pooling their vessels. But our expectations are definitely that requests related to FuelEU compliance on biofuels will increase as companies settle on their compliance strategy.”

Dutch subsidies for biofuel-blended bunkering have been making it cheaper to refuel with biofuel blends in Dutch ports in recent years compared with other regional hubs. But rising demand in Singapore narrowed biodiesel blends’ price premium to Rotterdam in 2024.

Biodiesel-blended VLSFO prices in Rotterdam were $50 per tonne cheaper than Singapore in January-May this year, compared with $166 in the same period last year, according to price reporting agency Argus Media. 

Supply bottlenecks

Current regulations of the International Maritime Organization do not allow most bunker barges to carry cargo comprising of more than 25% biofuels, despite IMO regulations allowing vessel to run with blends of up to 30%.

Biofuel blends above 25% require chemical tankers that fall under Marpol Annex II, as biofuel as cargo blended at more than 25% is considered a “noxious liquid substance”, whereas most bunker barges fall under Marpol Annex I.

These regulations put Rotterdam and some other ports at an advantage, as these ports can use inland bunker barges that are not regulated by the IMO.

India, South Korea and the International Bunker Industry Association had requested the IMO to consider allowing Marpol Annex I vessels to carry biofuel blends above 25% ahead of the UN agency’s most recent Marine Environment Protection Committee in April this year.

The IMO referred this issue to its technical sub-committee called the Evaluation of Safety and Pollution (ESPH).

“IBIA recognises that biofuels are an increasingly important part of the fuel mix for international shipping to achieve its climate ambitions over the next decade,” said Edmund Hughes, IBIA’s representative to the IMO.

“Through a submission to MEPC 81 in March on the supply of biofuels to a ship for use as fuel oil on board that ship, IBIA has demonstrated its desire to fully support the Member States and the wider shipping industry achieve that climate ambition.”

Regional supply concerns

In Europe, east Mediterranean is tipped to be among the regions that starts biofuel-blended bunkering with a lag, as ports in Greece and Türkiye have yet to bunker meaningful volumes of bio-diesel.

Türkiye’s energy regulator recently amended legislation to allow biofuel bunkering of up to 30%, while Turkish suppliers Petrol Ofisi and Arkas Bunkering obtained ISCC certification that proves sustainability of biofuel feedstocks.

Piraeus and Istanbul are the biggest bunker hubs in east Mediterranean.

The west Mediterranean is expected to be relatively better supplied than the east, as multiple major physical suppliers in Gibraltar and Algeciras, including Cepsa and Peninsula offer biofuels.